The major issue for investors that have brought brand-new apartments is to work out whether or not the market is going to bounce back.
Prices are falling to such an extent currently, that some investors, who bought at the height of the boom, are facing negative equity.
Here are some tips and questions to ask, from our most experienced investors, when deciding between an older or brand new apartment as your next investment
• Older blocks should have an established community, so you will be able to ascertain if the blocks are well-run
• New apartments should still be under-warranty, so you should be able to get defects fixed
• Older apartments will be past any claim date for defects
• Older apartments are more likely superior in quality (built with steel, concrete and solid brick)
• Older apartments will have less noise transmission due to superior quality
• Does the unit block allow for Airbnb?
• Older apartments tend to show a solid history of capital growth
• Older apartments usually have lower density than the new apartment blocks
• Strata levies will be lower (they usually have less swimming pools, gyms and saunas)
• Look for unit blocks that have been brought up to the current fire, health & safety standards
• You can always increase an older apartments value through renovations and improvements
• Older apartments are increasingly sought after for their period features and unique qualities
Ultimately, you should always factor in location.
Older apartments in good suburbs will always perform better than brand new apartments in less desirable suburbs.
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Friday, 12 April 2019